[SOLVED] Financial Risk Management-Fixed Income Markets

Financial Risk Management-Fixed Income Markets

In this project you will implement the mortgage calculator is Python:

1. Write a function in Python that will calculate the mortgage payment with the following parameters:

a. yield (the yield should be already adjusted to unit of payment)

b. Principal

c. Number of payments

2. Create a payment column using a replication function in python (hint use numpy arrays and repeat function (see here:

R function rep) in Python (replicates elements of a list/vector) – Stack Overflow)

1. Create a PV column using the formula : P/(1+y) ^ (payment number)

2. Create a first element in the column for outstanding principal assuming that Now Principal utstanding = Intial PrincipalUse the for loop to update the next element in each of the columns as follows;

1. calculate the interest paid through the formula: next interestpaid-principal outstanding*yield

2. calculate the next principal paid as principal paid = payment – interest paid

3. calculate the next amount utstanding = principal outstanding – principal paid

4. complete the amortization table by calculating the PV of principal and interest paid.